Award of licences for CO2 storage on the Norwegian continental shelf

‘Carbon capture and storage of large amounts of CO₂ is important to reach our climate goals and maintain industrial workplaces in Norway and Europe. Awarding new licences allows Norway to contribute an important role in establishing a commercial large-scale carbon capture for European emissions sources‘, said the Minister of Petroleum and Energy, Terje Aasland.

The exploration license awards an area to the east of the Sleipner East-field in the North Sea. The license is awarded to Sval Energi AS, Storegga Norge AS, and Neptune Energy Norge AS.

The licence is offered with a binding work program with installed mileposts that ensure fast and efficient progress, or the return of the areas if the licensees do not carry out the storage project.

‘It is important that attractive storage areas are made available for companies with concrete industrial plans that involves a storage need. I am pleased to award these licenses to three new companies. We need more actors to strengthen the development of carbon capture as a new, important, commercial marine industry‘, said Aasland.

For more information, maps, and work program, visit the Norwegian Petroleum Directorate’s website.

Background

Activities aimed at surveying and exploring for subsea reservoirs for the storage of CO2, as well as exploitation, transport, and storage of CO2 in such reservoirs on the Norwegian continental shelf are subject to the regulations on transportation and storage of CO2 into subsea reservoirs on the continental shelf (regulation 5th December 2014 no. 1517).

Anyone who is conducting such storage operations needs a permit in accordance with the regulations. In addition, on February 20th, 2020, the Petroleum Safety Authority established regulations on safety and the working environment for the transport and storage of CO2 on the continental shelf (the CO2 safety regulations)

The Norwegian government are facilitating the socio-economically profitable storage of CO2 on the Norwegian continental shelf. Companies that have the necessary expertise and that have specific, industrial plans that entail a need for storage on a commercial basis can apply to the Ministry of Petroleum and Energy for a licence adapted to the needs of the business. The government will conduct a predictable, efficient, and flexible process to award industrial players access to relevant storage options. Areas that are relevant for awards will be announced, among other things, to ensure competition.

In line with the regulations on transportation and storage of CO2 into subsea reservoirs on the continental shelf, the ministry normally expects to award an exploration licence prior to awarding an exploitation licence in a relevant area. Exploration licences can be awarded to one or more competent companies. If a licence is awarded to several companies, the ministry will, generally, appoint one of the companies as operator.

The award of exploration licences will normally be done with a work program including one binding phase and subsequent conditional phases with decision points for the continuation or relinquishment. Relinquishing allows other stakeholders with storage needs to apply for awards of the area. The work program will normally end with a demand that the companies make an investment decision on the realization of CO₂ a storage, and that they then submit a plan for development and operation (PUD) for the storage location or relinquish of the area.